Hiring staff? Here’s what your employment contract must include…

Taking on your first employee – or your fiftieth – is a significant milestone for any business. But before anyone starts work, there is one document you absolutely must have in place: a written employment contract. Not only is this a legal requirement in the UK, but it is also one of the most effective ways to protect your business, set clear expectations, and avoid costly disputes further down the line.

Is a written employment contract a legal requirement?

Yes. Under UK employment law, all employees are entitled to receive a written statement of employment particulars from their first day of work. This is not simply good practice – it is a legal obligation. Failing to provide one can result in complaints to an employment tribunal and financial penalties for your business.

The written statement must cover a range of key information, including:

• The names of the employer and employee
• The start date and, where applicable, the end date (for fixed-term contracts)
• Job title and description of duties
• Place of work
• Rate of pay and how often it will be paid
• Working hours
• Holiday entitlement (including public holidays)
• Notice periods for both parties
• Sick pay arrangements
• Details of any probationary period

Many businesses go further than the statutory minimum and include additional clauses covering confidentiality, intellectual property ownership, and post-termination restrictions – all of which can be extremely valuable in protecting the business.

What happens if you do not have one?

Operating without a written employment contract is a risk no business should take. Without one, disputes about pay, hours, holiday entitlement, or notice periods become very difficult to resolve – and in the absence of written terms, tribunals may make decisions based on implied terms or what the employee claims was verbally agreed.

A well-drafted employment contract removes this ambiguity entirely. It gives both parties a clear reference point and significantly reduces the likelihood of misunderstandings escalating into formal disputes.

Key takeaways:

• All employees are legally entitled to a written statement of employment particulars from day one.
• Failing to provide one can expose your business to employment tribunal claims.
• A good contract goes beyond the statutory minimum to include confidentiality, IP ownership, and notice provisions.
• Template employment contracts are widely available and can be adapted to suit your specific business needs.
• For more complex roles or senior hires, consider having a contract professionally reviewed.

Getting your employment contracts right from the outset is one of the smartest investments you can make as a business owner. It protects you, protects your employees, and creates the foundation for a clear and professional working relationship.